Victory University to close due to financial difficulties

Victory University will close at the end of this semester, officials said on March 6, 2014.

March 6, 2014 — Victory University will be closing its doors as of May 2, 2014. (Mike Brown/The Commercial Appeal)

Mike Brown/The Commercial Appeal
Damon Nesbitt works his phone, a tablet and the computer in the Victory University library to come up with a plan after learning that the school will close this spring. Nesbitt, a new student, said he was scheduled to begin taking classes on Monday.

Armed with cash from investors, California entrepreneur Michael K. Clifford marched into Memphis with a bold plan to turn a struggling Christian-based college into a profitable university.

Five years later, Victory University is set to close, ending Clifford's experiment to make money by schooling hundreds of the city's poorest students.

Financially strapped Victory University will close at the end of its spring semester, officials on the campus at 255 N. Highland confirmed Thursday.

"We have tried for five years to help enhance Christian education in Memphis for an underserved group of citizens," Clifford responded Thursday in an email to The Commercial Appeal. "My family has lost a great deal of investment."

Nearly 1,600 Victory students, many of them Memphians attending on full scholarships, now must scramble to enroll in other schools next semester.

Exactly what caused the financial failure was not explained by Victory officials. One possible indicator: Too few students on one-year scholarships enrolled the second year when they would have paid tuition.

Clifford, one-time owner of Phoenix radio station KUPD-FM and former communications adviser to evangelist Billy Graham, had raised cash from investors to pour into his education experiment.

In 2011, Clifford's Significant Psychology LLC reported to the U.S. Securities and Exchange Commission that $8.02 million was raised for Victory University in Memphis, according to the North County Times, a newspaper at Escondido, Calif.

In raising cash, Clifford followed on the heels of for-profit education pioneers such as billionaire Leon Black's Apollo Management. The New York investment firm bought the University of Phoenix, an online college, and made it a household name in education circles.

Clifford's similar experiment in Phoenix turned a financially strapped religious college into a publicly-traded entity called Grand Canyon University with a reported enrollment of 52,000 and annual profit of almost $90 million.

"There have been a number of factors involved, but after trying every avenue to bring in added revenue we just couldn't reach sustainability," Victory president Shirley Robinson Pippins said Thursday. "We hope to finish strong and do whatever is necessary to help students complete their degrees or transition to other institutions of higher education."

Victory students expressed surprise Thursday after the closing was announced.

"I don't know if it's like a bucket of cold water. Not that cold. I don't know," said Victory freshman Isaias Ramos, a Kingsbury High School graduate who had won a full scholarship.

Juggling studies and working in the family painting and remodeling business, Ramos said he isn't sure of his next step.

"I'll have to think," Ramos said. "I'm not happy."

Students will receive counseling assistance and placement help, Pippins said.

Victory officials will delay the start of the second half of its 15-week spring term and operate with a smaller workforce beginning on Monday.

On March 17, students will be allowed to complete the term that wraps up on April 25. The final graduation ceremony, scheduled 6 p.m. May 2, would confer degrees on about 150 students.

"I'm proud of the way our enrollment grew to represent a more diverse student body in both age and race and in the ways we reached out to the Latino community," Pippins said. "We offered our site as a facility for thousands of community members to use and I believe we did a lot of good. I'm sorry that it's ending, but I believe that our good work will live on."

Formerly known as Crichton College, the school was founded in 1941 as a Christian-based liberal arts school that grew to offer 16 majors. The school's jittery finances date back years.

In 2008, Crichton slashed its budget, cut jobs and administrators proclaimed the school was drowning in red ink.

Clifford's California-based Significant Foundation purchased Crichton for $5.3 million. The college then had about 2,000 students, but enrollment fell to about 800 by 2012, then climbed to about 1,600 currently, including 700 online students.

Trying to draw more students after Clifford stepped in, Victory added a dorm, increased its athletic offerings and made greater efforts to attract day students. But it wasn't enough to turn the school around, Pippins said.

Compounding Victory's troubles, in 2012 the Southern Association of Colleges and Schools Commission on Colleges issued a public sanction regarding the school's accreditation because of its financial problems.

Its struggles contrast with the University of Memphis, which also lost enrollment in recent years, although the public school has reversed course and posted its highest-ever numbers of applications for fall 2014 admission.

"Unfortunately, the current regulatory environment just is no longer conducive to a free enterprise system of alternative funding sources for higher education," Clifford says in his email. "And it is a shame that what we hoped and prayed for in high paying job creation in Memphis never materialized."